Supreme Court Corner: Q1 2016

Intellectual Property and Technology News

Issue: Whether the Federal Circuit erred in holding that a single entity can “actively induce” itself to infringe a patent under 35 U.S.C. § 271(f)(1) and whether it erred in holding that supplying a single, commodity component of a multi-component invention from the United States is an infringing act under 35 U.S.C. § 271(f)(1), exposing the manufacturer to liability for all worldwide sales.

Life Technologies manufactures genetic testing kits comprising several components which, together, are capable of copying, or amplifying, DNA. Life Technologies manufactures one component of its kits (Taq polymerase) in the United States, and ships it to its facility abroad where the full kits are manufactured and sold worldwide.

Promega filed a patent infringement suit against Life Technologies alleging infringement under 35 U.S.C. § 271(f)(1), which bars supplying “all or a substantial portion of the components of a patented invention . . . in such manner as to actively induce the combination of such components outside of the United States.” (Emphasis added.) After a jury found infringement and awarded damages for worldwide sales, the district court granted judgment as a matter of law that Life Technologies did not infringe § 271(f)(1). The Federal Circuit reversed, finding (1) Life Technologies could actively induce itself to infringe by shipping a component to its own facility overseas; and (2) a party may be liable under § 271(f)(1) for supplying a single component for combination outside of the US.

On appeal, Life Technologies argues § 271(f)(1) requires active inducement of another; a single entity cannot “actively induce” itself to infringe; and it cannot be liable for supplying a single, commodity component of the patented invention. Promega argues the Federal Circuit correctly found the statutory text does not require active inducement of another and the single component Life Technologies supplied could be “substantial” under the statute.

Cuozzo Speed Techs., LLC v. Lee

PATENT – Cert. Granted

Issue: Whether the Patent Trial and Appeal Board (PTAB) may use a “broadest reasonable construction” standard in construing patent claim terms in inter partes review (IPR); and whether its decision to institute an IPR is judicially unreviewable.

The 2011 America Invents Act (AIA) established the PTAB to adjudicate IPRs, a new adversarial proceeding in which parties may challenge patents as anticipated or obvious in view of printed prior art. Generally, the challenger files an IPR petition setting forth the grounds for the challenge; the patent owner may file a preliminary response; and the PTAB decides to institute trial if “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” 35 U.S.C. § 314(a). According to 35 U.S.C. § 314(d), the institution decision is “final and nonappealable.” If instituted, it proceeds to trial, culminating in a final written decision on patentability.

In the final decision on Cuozzo’s patent, the PTAB found certain claims obvious over the prior art based on claim terms construed under the broadest reasonable interpretation (BRI) standard, the same standard the PTO applies in patent prosecution. On appeal, a three-judge panel of the Federal Circuit found the PTAB’s institution decision unreviewable, and found the BRI standard for claim construction permissible. A divided Federal Circuit denied rehearing (6-5).

In its petition, Cuozzo argues the PTAB should apply the same claim construction standard as the district court, i.e., “ordinary and customary meaning.” Cuozzo argues that while BRI is appropriate in prosecution where the Patent Owner can easily amend its claims, the Patent Owner cannot freely amend in an IPR, and the PTO regulation applying BRI in an IPR is unlawful because the PTO lacks authority to prescribe substantive rules. Cuozzo also argues the decision to institute review should be appealable at least when it “violates clear statutory limits.”

The government argues the BRI standard represents the long-standing practice of the PTO, and that the statutory text and Congressional intent are clear that institution decisions should be final and non-appealable.

Oral argument is set for April 25, 2016, and a decision is expected by the end of June 2016.

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DLA Piper is a global law firm with lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific, positioning us to help clients with their legal needs around the world.